Notice to Members
Notice No. 381
10/14/2004
Proposed New COMEX Division Rule 4.89, Settlement Price Committee
The Board of Directors, on October 6, 2004, and the Executive Committee, on September 28, 2004, approved a recommendation from the COMEX Governors Committee to adopt new COMEX Division Rule 4.89 to allow for Staff participation on the Settlement Committees for Silver, Gold, Copper and Aluminum Options. This procedure will be effective on November 8, 2004 for Silver Options, and the subsequent roll-out of Gold, Copper and Aluminum Options will occur on a schedule as determined by the COMEX Governors and the NYMEX Board of Directors. Staff will participate as a voting member with final right to veto on the Settlement Committees. Since 2003, NYMEX has successfully implemented similar procedures on the Settlement Committees for Calendar Spread Options, Crack Spread Options, PJM Options and Futures, and Natural Gas Futures, as well as for Crude Oil Futures, which was also approved at the October 6, 2004 Board of Directors meeting. In all instances to date, the integration of Staff on the Settlement Committees has produced positive feedback from both internal and external sources.

The proposed amendments to COMEX Division Rule 4.89 affect a "Special Matter" under the terms of the COMEX By-Laws. Accordingly, COMEX Division Members have ten (10) days to submit a petition signed by owners of at least 155 COMEX Division Memberships requesting a vote of the COMEX Division Members to disapprove the amendments, pursuant to the procedures set forth under COMEX By-Law 205(D). If a petition is not received, or if the amendment is not disapproved, it will be submitted to the Commodity Futures Trading Commission.

Any questions regarding this Notice should be directed to Thomas LaSala, Senior Vice President, Compliance and Risk Management, at (212) 299-2897, or to Arthur McCoy, Vice President, Financial Surveillance and Risk Management, at (212) 299-2928.

NEW COMEX Rule 4.89, Settlement Price Committee

(A) The Settlement Price Committee, which shall be a Regular Committee, shall consist of such members and permittees as the Chairman may appoint with the consent of the Board. Additionally, one (1) Exchange employee will be a voting member of the Committee in the Silver Options Contract. The Exchange employee shall have final authority in all instances to veto and override price determinations made by the Committee. The Committee shall be divided into sub-committees for each futures and options contract traded. To the extent possible, each sub-committee shall consist of at least six (6) Members, at least one of whom shall be a Floor Broker, one of whom shall be a Floor Trader, and one of whom shall represent trade interests (either personal, of his employer, or of a substantial customer base).

(B) At the conclusion of the RTH trading session on the Exchange Floor each day, settlement prices shall be determined for every contract listed.

(C) The Settlement Price Committee, or any subcommittee thereof, shall have the authority to request from any member representing that certain market information should be considered in the determination of a settlement price, such documentation as it deems appropriate including, but not limited to, trading cards and order tickets.
NOTE: Rule to be amended to fashion a roll-out in the Gold, Copper and Aluminum Options markets as determined by COMEX Governors and NYMEX Board of Directors.
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com